AngloGold reduces gold hedge book by further 1.4 million ounces

South Africa's top gold miner, AngloGold Ashanti, reduced its gold hedgebook in July to well below a single year's production.

LONDON - 

Tier 1 gold miner AngloGold Ashanti has taken advantage of a strong earnings position to further reduce its gold hedge book in July by some 1.4 million ounces.  This brings the total amount of gold hedged to less than a single year's production.  This indicates the company's continued confidence in the forward price of gold, maximising its exposure to the spot price.

 "We've worked hard to strengthen our balance sheet and that gave us the flexibility to skin the hedge book by getting it well below one year's production," Chief Executive Officer Mark Cutifani said. "The market fundamentals are extremely robust for gold, which supported our decision to move aggressively sooner rather than later, to ensure we maximize our exposure to spot prices."

AngloGold's hedge commitment now stands at 4.47 million ounces - down from 5.84 million ounces at the end of the first quarter, and Cutfiani says that the company anticipates achieving a 7% discount to spot prices at a $950 an ounce gold price, with the hedge book reducing at 800,000 ounces a year which would mean the company would be unhedged by end 2014.  This ear the book would reduce to around 4.1 million ounces - a year ahead of the original target date.

The July reduction was enabled through using some of the proceeds of the successful issue during the quarter of the five-year convertible bond, proceeds from the sale of AngloGold's stake in Boddington in Australia to fellow Tier 1 gold miner, Newmont and strong Q2 earnings.

SUBSCRIBE to Mineweb.com's free daily newsletter now.

Disclaimer

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

Print story      Email story      Subscribe to free newsletter

Back

 

responses to this article

Name
Subject
Comment